While tiny homes are a significantly cheaper alternative to buying a traditional home, there are still a handful of costs to consider. The average cost of a tiny home is $52,000 in the U.S. But the actual cost of a tiny home can be considerably higher or lower than the average, depending on a variety of factors.
Things like location, size, features, amenities, and building materials will all factor into the price of your tiny home. In order to begin budgeting for a tiny home, the first decision you need to make is whether you will build or buy it.
How Much Does It Cost to Build a Tiny House?
If DIY is your jam, then building a tiny house could be a creative and cheap path to homeownership. It’s typically cheaper to build a tiny home than to buy one prebuilt, but don’t underestimate the work that goes into it. If you aren’t a skilled or knowledgeable builder, mistakes can cost you more money than you bargained for. Here are most of the expenses you’ll need to consider:
- Land — If you don’t already own land to build your tiny home on, you’ll need to buy land or lease a lot. The cost of land can vary dramatically depending on where you live in the U.S., so do your research. If your tiny home is on a foundation, you may have to pay property taxes. You’ll also need to factor in the cost of getting utilities to your property if you build your home on vacant land.
- Foundation — If you decide to build your tiny home on foundation, you’ll need to construct it. Pouring the foundation for a tiny home will vary in cost, depending on the type of foundation you go with. Your choices are typically poured slab concrete, basement, or crawl space. You can expect an average cost of $5,000 to $8,000 for the foundation.
- Building permits — If you build a tiny home on your own, you may need to pay for a local building permit. The national average cost of a building permit is around $1,321. The actual cost will depend on location and what that area’s rules and legalities are. If you plan to have your tiny house professionally built by a company, you’ll typically not have to worry about building permits. Most companies will take care of that on their end.
- Square footage — Excluding land or any extras, the cost, on average, of a tiny house per square foot is $300. This is about double the price per square foot that it costs to build the average traditional home because larger construction jobs make for more efficient use of resources. Keep in mind that the costs per square foot will vary depending on the size, materials, and floor plan. A custom layout, for example, will cost more per square foot.
- Materials — The cost of building materials might be the biggest expense when it comes to building your own tiny home. According to Tiny Home Builders, you can expect to spend a minimum between $18,000 and $25,000 in materials alone. To save on the cost of materials, it’s a good idea to shop around, but that doesn’t mean you should always opt for the cheapest option because this could ultimately raise the costs of repairs and maintenance.
- Amenities — The type of amenities you choose to include will impact the final cost of your tiny dwelling. Consider the quality of things like appliances, furnishings, and decor, as these will all make a difference when it comes to how much you are willing and able to spend. Think of ways to save money on amenities, such as opting for reclaimed materials or purchasing furnishings with dual purposes, like a sofa with built-in storage.
How Much Does It Cost to Buy a Tiny House?
As you can infer from the expenses above, building your own tiny home takes a ton of time and consideration, not to mention the physical labor involved. So it’s understandable if you’d prefer to simply purchase a prebuilt one instead.
One option is to go with a prefabricated tiny-home provider, such as Tumbleweed, that can be delivered straight to you. Although you’re saving significant time and effort by buying a tiny house over building one, most prebuilt homes will start at around $80,000 or more depending on the level of luxury and amenities included.
Another option is to buy a pre-owned or used tiny house. Buying pre-owned is usually cheaper than buying new because of property depreciation, and you may even be able to bargain the price with the current owner. However, buying pre-owned means the current property may not be set up the way you’d like, so you may have to invest money into re-customizing it to your preferences.
Other Costs to Consider
- Homeowners insurance — Getting insurance for a tiny home can be a challenge, especially if you built the house yourself. Details on how the house was constructed, how much it weighs, and how you plan to use it will all factor into the cost for insuring your tiny home. According to ValuePenguin, the average rate for a tiny house insurance policy was $852 per year. For mobile tiny homes, you’ll probably need RV insurance. For homes built on foundation, you’ll need manufactured home insurance
- Maintenance and repairs — No matter the size of your home, or if you built it or bought it, you’ll need to factor in the costs of ongoing maintenance and occasional repairs. Luckily the costs for maintenance and repairs on a tiny home will be a fraction of what you’d pay on a traditional full-size home. And remember that in order to keep these costs down, steer clear of choosing the cheapest materials to construct your home since they’ll most likely wear out sooner.
- Utilities — Utility costs will depend on the type of tiny home you have and where it’s located. You will typically have the standard utilities such as gas, electric, water, sewer, and internet. Because the space is small, these costs should be less than with a traditional home. One way to further reduce utility costs is by installing your own energy-efficient sources, such as solar panels or rainwater harvesting systems.